Posts Tagged ‘housing loans’

While you’re out, drop by the post office to pick up some stamps . . . and a mortgage

On Oct. 1, two divisions of the Nihon Yusei Group, in English known as Japan Post Holdings, or JP, will consolidate. If you were never aware that four separate companies make up the post office service — Yubin Kyoku, Nihon Yubin Jigyo, Yucho Ginko and Kampo Seimei — then you shouldn’t feel embarrassed. The vast majority of Japanese don’t know about it either, so the merger of the two postal-related services, Yubin Kyoku, which manages the post office system, and Nihon Yubin Jigyo, which manages mail delivery, into one entity called Nihon Yubin may hardly qualify as news to most people.

In fact, most people will wonder what actually distinguishes these two entities. Aren’t the business of managing post offices and the business of delivering mail part and parcel of the same general enterprise? Apparently not, though you’d have to actually work in either of those companies to understand why. Perhaps the best way to explain this conundrum is to look at one of the new services that will be offered after the consolidation takes place, something called tsucho azukari.

With this service, a person who has a savings account at Yucho Ginko (Japan Post Bank) can entrust (azukari) his or her passbook (tsucho) to a regular delivery person, who brings it to the bank so that an employee can carry out a desired transaction on the person’s behalf. Logic would say this sounds like a cooperative service between Nihon Yubin Jigyo, the delivery arm of JP, and Yucho Ginko, the banking arm of JP, but all Yucho Ginko are located in JP post offices, which means it’s really a cooperative service betweeh Nihon Yubin and Yubin Kyoku.

Tsucho azukari is actually a traditional service, especially for the elderly in rural areas where it is sometimes difficult to make it to the post office. But in the past, it was an informal service, simply something that a delivery person did for someone on his route as a personal favor. The new service will be implemented initially on a trial basis at only 52 of JP’s 24,000 post offices. The service itself is less important than what it represents, a reversal of the postal decentralization that former Prime Minister Junichiro Koizumi made his life’s work and which started in 2007.

Cleaning up after the March 11 tsunami in Sendai (Satoko Kawasaki photo/The Japan Times)

For seven weeks now people from all over the world have been donating money to various charities to help the victims of the March 11 earthquake and tsunami. According to NHK’s morning consumer affairs show, “Asaichi,” as of April 25 ¥1.7 billion had been collected by Japan Red Cross and other charity organizations. After going through four stages of bureaucratic processing the money was supposed to start reaching victims on April 27. In the first wave of payments, affected households would receive ¥350,000 for each family member who died or is declared missing. If the family completely lost its home in the disaster, it would receive an additional ¥350,000. If the home was partially destroyed, the amount would be ¥180,000. Families who have been evacuated from the area surrounding the Fukushima No. 1 nuclear reactor receive ¥350,000.

That cash will certainly help, but as explained in an earlier post the burden of rebuilding shattered lives mainly falls on the central government, which will only compensate homeowners and businesses by so much. And as explained in another post, earthquake insurance, like supplemental medical insurance, is not designed to cover entire losses. Basically, benefits provide a little extra money, something to live off of while a homeowner or business owner decides whether or not he wants to go through the grueling process of starting over from scratch, which means borrowing money. NHK interviewed a Sendai family whose 4-year-old home was spared from the tsunami but nevertheless condemned by the local government because the landfill under it had subsided to the point where the foundation was at risk. They still owe more than ¥20 million on their 30-year mortgage and though they have earthquake insurance the benefits will cover, at most, only half the balance; which means they have to come up with the other half of the loan themselves. Then, presumably, they have to take out a new loan if they want to buy a new house. According to one financial planner on the show, they’d be better off renting, “but, of course there are financial disadvantages to renting,” she added. Obviously, in this case, there are even bigger disadvantages in owning.